Business Plan

Business Plan

<Business Name>

January 1, 2009

Table of Contents

Page

1.Introduction 4

2.Executive Summary 4

3.Mission, Strategies, etc. (Company, Strategy and Management Team) 5

3.1.Vision 5

3.2.Mission 5

3.3.Objectives/Goals 5

3.4.Keys to Success 6

3.5.Strengths, Weaknesses, Opportunities and Threats (SWOTs) 6

3.6.Strategies 7

4.Products and Services 8

5.Revenue Sources 9

5.1.Paid Per Click Advertising – Google AdSense 9

5.2.Affiliate Program – Amazon.com 10

5.3.Affiliate Program – <Affiliate Name > 10

6.Future Growth Opportunities 10

6.1.Live Online Teachers 10

6.2.Classroom Lessons 10

6.3.Video Lessons 11

6.4.Books – Short Stories 11

6.5.Printed Lesson Materials 11

7.Marketing Plan 11

7.1.Market Analysis 11

7.2.Competition 12

7.3.Customer Profile 12

7.4.Market Size, Sales & Share Projections 13

7.5.Strategies for reaching or exceeding your targeted sales levels 13

7.6.Sales Strategy 14

7.7.<Website 1> 14

7.8.<Website 2> 14

7.9.<Website 3> 14

7.10.Advertising and Public Relations 14

8.Operations Plan 14

8.1.Location 15

8.2.Production 15

9.Management & Administration (Organization Plan) 15

9.1.Company Ownership 16

9.2.Managerial Style 16

9.3.Management 16

9.4.Administration 17

10.Financial Plan 18

10.1.Projected Cash Flow 18

10.2.Start-up and Operating Budgets 18

10.3.Operating Budget 19

10.4.Accounting and Inventory Control System 19

10.5.Cash Flow Projections 19

10.6.Funding Requirements 21

1.  Introduction

Introduce your business here and provide a high level overview. Don’t get into too much detail, rather think of this section as an elevator pitch. Answer questions such as business name, purpose, target market, revenue source(s), structure (corporation type, LLC, etc.), physical location and ownership. This section should be a few paragraphs (about half a page).

The purpose of <Business Name> is to establish content based websites for the purpose of generating revenues through advertising. These websites will develop a community of users by offering value-based content free of charge. Content will vary according to the website; language lessons, articles, photos, illustrations, open source applications, how-to articles, and other yet to be determined content.

Initially, <Business Name> will establish the following websites:

  • <Website URL 1> A site which offers free Chinese language lessons.
  • <Website URL 2> A site which will offer an open source <Application Name> along with <Type of> related document templates.
  • <Website URL 3> A site which will offer <Description/Type> document templates.

The business is a subchapter S Corporation, which was incorporated on <Date>. The corporation has one shareholder, <Shareholder Name>. <Business Name> has <Number Spelled Out> principals, each sharing equal interest in the corporation. They are <Shareholder 1 Name>, <Shareholder 2 Name>, and <Shareholder 3 Name>. <Shareholder 1 Name>is the President, <Shareholder 2 Name> is the Secretary and Treasurer, <Shareholder 3 Name> is the Vice President. <Number> shares of stock were initially issues, with each principal receiving <Number> shares.

<Business Name> is physically located at, and operated from <Address>.

2.  Executive Summary

Write this section last as it is a high level summary of your entire business plan. This section is read by high level executives who have a need to know about your business but don’t necessarily have the time to read all the specifics. If they need specifics on any particular topic, they will go to that section of the business plan.

State the purpose of your business.

Identify Ownership

Target Market

Unique Selling Proposition

Growth Plans

3.  Mission, Strategies, etc. (Company, Strategy and Management Team)

3.1.  Vision

A vision statement is where you present a clear and defined description of the desired outcome of your business. The first sentence of your vision statement should be a short, yet powerful, sentence which captures the overall spirit of the business. The vision statement can be one paragraph, or several paragraphs.

<Business Name>’s vision is to be an authoritative source of free information, products and services on the web. We will earn our customers’ trust, and following, by offering only the highest quality information, products and services – all free of charge. <Website 1> will

3.2.  Mission

The mission statement is a short statement of the purpose of the business.

To develop websites where people can come for free products and services which will help them to advance in their professional and personal lives.

3.3.  Objectives/Goals

The business objectives are statements defining the tangible deliverables of the business and what they are expected to achieve. The objectives should be concisely written so they can be evaluated at a later date to see whether they were achieved and to the extent they were achieved. When writing the objectives be sure that they are specific, measurable, attainable, realistic and time bound. Start out by stating the overreaching objective of the business (the primary reason for chartering the project), then follow it up with the more specific detailed objectives of the business.

You should also include any objectives which are excluded from the business. For example, someone may expect that by deploying a new helpdesk system that the productivity of the people working the helpdesk will increase, when in actuality it will not.

3.4.  Keys to Success

In this section you need to identify the keys to success for your business. What will make your business more likely to succeed than other comparable businesses? What makes your business special?

Keys to success for <Business Name> are:

  • High Quality Content. All websites will emphasise content which is of the highest quality to the target audience.
  • Value. People will only go to websites which offer something of value. All of our websites will emphasise value in the content and services provided.
  • Community. The success of this business depends greatly on the building of communities on the web. Because the revenue sources are from advertising maximizing traffic on the websites is critical to its success. By building communities around these topic specific websites the sites will generate traffic and links from other sites.
  • Credibility. Since the websites being developed are in specialized fields and targeted towards professionals and students, credibility is a key success factor.
  • Reputation. The websites need to generate organic traffic on the Internet through referrals and word of mouth. Establishing a reputation as subject matter experts and providing high quality services and products is key to the success of this business.
  • Usability. Providing products and services people want, even if it’s free, only works if the users can easily find what they’re looking for. Ensuring the usability of the websites adds to the likelihood of success in the business.

3.5.  Strengths, Weaknesses, Opportunities and Threats (SWOTs)

For many of us entrepreneurs it’s difficult to identify their strengths and weaknesses; especially our weaknesses. We like to think that we are capable of most anything we put our minds to and that we’re experts on most everything. However, successful entrepreneurs have a common character where they are able to objectively identify their weaknesses and seek outside help accordingly. By identifying our weaknesses we determine where we need to improve ourselves, but most importantly for what areas we should look to outsource to someone more qualified. Retrospectively, by identifying our strengths we then know what can be leveraged to build the business and ensure success.

Strengths:

  • Principals have a combined total of 9 years of experience in website development and generating traffic (HTML Coding, Website Design, SEO, Link Building and Article Writing and Distribution).
  • Experience and knowledge in the subject matters on which the websites will be developed. These subject matters are; <Subject Matter 1>, <Subject Matter 2> and <Subject Matter 3>.
  • The Principals hold the following certifications; <Certification 1>, <Certification 2>, <Certification 3> and <Certification 4>.

Weaknesses

  • Funding is limited for this start-up.

Opportunities

  • There are a limited number of websites which have similar content.
  • Content based websites is still at its infancy, this is a growing field in profiting from the Internet.

Threats

  • Larger and better funded companies can duplicate our products and services easily.

3.6.  Strategies

The strategies section is where you sit down and develop a high level map of how you’re going to build your business. The strategies should be developed from a 15,000 foot view. You’ll use this section as your roadmap to building the business.

In order focus the development of the business, the following strategies will be followed.

  • Develop websites with key search terms in the URL.
  • Develop content for websites. Leverage freelancers through sites such as www.elance.com to develop content.
  • Build links through reciprocal links, linkbuilding campaigns, article distribution, newsletters and blog advertising. One way inbound linking campaigns will be sourced out through www.elance.com. Blog links will be developed through sites such as www.smorty.com. Articles which we don’t write ourselves will be outsourced through www.elance.com and will be circulated through various article distribution websites and newsletters.
  • Build opt-in email subscription lists through enrolments on each of the websites and distribute monthly or quarterly newsletters.
  • Continually add new content.
  • Continually add new services, features and products.

4.  Products and Services

Every business produces some sort of product or service. In this section you will identify and describe the product and/or service your business will provide.

Since the business model is to generate advertising revenue from websites, <Company Name> will provide products for free. In order for these free products to attract traffic to the website they must be of the highest quality. The products the business will provide are:

  • Document Templates. High quality templates for widely wanted documents which are easily understood and applied to the visitors needs and circumstances. The document templates will include instructions and explanations, standard verbiage and real-life examples.
  • Language Lessons. One of the websites will provide online Chinese lessons. The lessons will include both audio and written versions, printable flash cards, online practice program and detailed breakdown and explanations of the Chinese characters. The unique approach to these lessons will be to give the student both insight into the language and the tools they need to learn it.
  • Articles. Articles which offer advice and guidance to users in relevant topics. These articles will be located on the websites and distributed through means such as newsletters and article distribution sites.
  • Product Reviews. Reviews of products such as books, tools and other products will be provided on the websites.

5.  Revenue Sources

The primary reason to start a business is to make money. In this section you will identify how your business will generate revenues.

<Business Name> will generate revenues through advertisements on the websites and in newsletters. This section identifies the advertising sources along with an estimate of the annual revenues generated by each advertising source.

Based on the three primary websites identified in this business plan, the total expected annual revenues starting after the first year is $157,000. This projection is a rough estimate and will depend greatly on the effectiveness of building traffic to the three websites. Additional revenue can be generated in the future as other services and products are developed which leverage the websites.

5.1.  Paid Per Click Advertising – Google AdSense

Pay-per-click advertising through Google AdSense is expected to generate about $128,000 per year in revenues. Relevant ads are generated by AdSense based on the content of the website. The bids for relevant ads vary according to the topic. We have based the following revenue estimates based on a pilot of each of the three websites and determining overall traffic on similar websites. The calculations for CPM are based from actual effective Cost Per Thousand earnings as measured through test pages with similar content to what the live websites will contain.

<Website 1>

Page Views per Day: 22,000

Effective CPM: $2.50

Annual Revenue: $20,000

<Website 2>

Page Views per Day: 4,000

Effective CPM: $28.75

Annual Revenue: $42,000

<Website 3>

Page Views per Day: 10,000

Effective CPM: $18.21

Annual Revenue: $66,000

5.2.  Affiliate Program – Amazon.com

Amazon is often referred to as the founder of the online affiliate program. They developed and perfected it at a time when online retail was at its infancy. On each of the three websites we will include a books section where we will provide book reviews along with the opportunity for people to purchase the books from Amazon.

As we didn’t have a method to create a pilot to determine projected revenues for Amazon, we based our estimates on what other people have measured from their websites. On average, actual revenues where Amazon.com affiliate program earns about 1/5 of Google AdSense. Based on this we project Amazon revenues to be approximately $25,000.

5.3.  Affiliate Program – <Affiliate Name >

<Affiliate Name> has a generous affiliate program with 30 day cookies and 10% commissions on movies. Commission for other products vary; however, Chinese language DVD’s are what we will be promoting. Reading various blogs online there are some people who claim that this is their top earning affiliate program; however, we don’t have a basis for an actual estimate. Working with a conservative estimate we calculated an average sale of 40 DVD’s per week at an average cost of $20 each. With a 10% commission this projects $4,000 in annual revenue for the Chinese language website.

6.  Future Growth Opportunities

We entrepreneurs know that business is dynamic and in order to succeed we need to be able to make changes to the business according to market demands. This section identified areas which the business can expand into.

6.1.  Live Online Teachers

Providing online live teachers for one on one sessions. The going price for online live teachers is $10 to $15 per hour; whereas, the going rate in the States is $40 per hour. Teachers would be located overseas in order to take advantage of the lower salaries. Concern is with time zones, as I need to have teachers available during American and European daytime and weekend hours.

6.2.  Classroom Lessons

Leverage the teachers from the live online lessons to provide classroom lessons to small groups of students. Classrooms would be located in the country of that language and would offer an immersion experience. Possibly include tourist activities and/or travelling.

6.3.  Video Lessons

Create DVD’s for lesson groups (i.e. Lesson 1 through 10). Each DVD would be about 60 minutes. DVD’s could sell online and also be distributed to stores. This would require a large upfront production cost.